According to a new report from CoinGecko, government accounts hold 2.3% of the total Bitcoin supply. Their holdings amount to 463,741 BTC, which has decreased from 529,591 BTC a year ago.
Despite these impressive numbers, the general trend is declining. Two out of seven holders have completely liquidated their assets, with El Salvador being the only one actually purchasing more Bitcoin.
Are Governments Disposing of Bitcoin
While companies like MicroStrategy have received significant media attention for their massive Bitcoin holdings, governments also occupy two spots among the top 10 BTC whales.
CoinGecko discovered several interesting trends while analyzing the relevant statistics. For example, currently only five countries are actively holding Bitcoin.
The US federal government is the largest national Bitcoin holder. Cryptocurrency is closely studying its actions, and the industry is making major efforts to influence policy. The key issue is that the US does not purchase BTC but seizes it from criminal operations.
Towards the end of President Joe Biden's term, the US began liquidating its BTC holdings. This is a major motivating factor for Trump's cryptocurrency strategic reserve. The reserve is not meant to purchase Bitcoin, but to organize existing holdings and protect them from future sales.
China is a somewhat overlooked government Bitcoin holder, which can be explained by two reasons. Clearly, China is somewhat hostile to cryptocurrency, and unconfirmed rumors about policy liberalization could impact the market.
China seized approximately 200,000 Bitcoins in 2020 and has not moved since. Therefore, this large reserve can avoid mainstream attention.
The UK government, reflecting China's Bitcoin strategy, maintains a substantial reserve holding pattern. Germany completely liquidated its holdings last year, reducing its substantial holdings to zero. This was not due to anti-cryptocurrency ideological reasons but to cover budget deficits.
Ukraine performed a similar complete BTC liquidation for ongoing war efforts.
The aforementioned government whales all acquired Bitcoin through criminal seizures, with Ukraine receiving cross-border donations.
In contrast, only two holders are actively trying to acquire Bitcoin. Bhutan received international attention for BTC profits. However, this was derived from mining, and it has sold nearly half its supply in recent months.
In other words, El Salvador is the only government in the world currently increasing its Bitcoin supply. Although it agreed to stop purchasing BTC to receive an IMF loan, purchases continue. This has caused some hostility within the country, but the IMF appears satisfied with its actions.
In other words, CoinGecko examined the impressive numbers and drew meaningful conclusions. While governments appear to hold massive Bitcoin supply, this trend is surprisingly fragile.
Last year, seven governments held BTC, and two have since lost it. A few political changes could completely alter this environment.
